1. Field of the Invention
The present invention generally relates to systems and methods for monitoring and responding to tax delinquencies. In particular, embodiments relate to systems and methods for tracking, reporting, and resolving tax delinquencies on real properties to protect the interests of mortgage lenders.
2. Brief Description of the Related Art
When a financial institution such as a bank makes a loan to enable a borrower to buy real property, the financial institution generally acquires a lien (e.g., a mortgage) on the property to secure the loan. If the borrower defaults on the loan, the lender can foreclose on the property to mitigate the lender's loss from the default.
Governmental entities such as counties, school districts, and municipalities may also have liens on a property if taxes due on the property have not been paid. In addition, other parties may acquire interests in real properties after tax defaults through mechanisms such as tax sales and foreclosures. Therefore, a mortgage lender typically monitors tax payment and delinquencies, as well as related actions by tax authorities, to ensure that the lender's interests in properties securing their loans are not compromised. In some cases, a mortgage lender may intervene by redeeming a property itself (e.g., by paying a delinquent tax after a borrower's default) in order to protect the lender's interests.
Real property mortgage lenders often engage service providers to advise the lenders of the status of property tax payments due on real estate securing their loans. In addition to monitoring tax payment status, service providers may provide a variety of other tax-related services to lenders. For example, where a mortgage lender requires that tax payments be impounded on behalf of borrowers, a service provider may monitor and oversee the transfer of monies to the taxing authorities and provide confirmation to the lender that the taxes have been paid.
A service provider's lender customers may have a large number of loans secured by real properties in a multitude of locations. A large service provider will thus need to monitor tax payment and delinquency status for a multitude of taxing authorities (e.g., county tax collectors, school districts) nationwide. Service providers generally perform their services using a combination of automated systems and manual activities.
As the number of loans being serviced by a service provider increases, the demands on computer and human resources may become substantial. Moreover, due to the multitude of variations in laws, rules, and procedures of the various taxing authorities, the job of monitoring and addressing delinquency conditions may be complex. In addition, a substantial amount of resources may be needed to retrieve the relevant payment and delinquency status information and to determine the amounts due to the taxing authority. For example, for each property for which a tax default has occurred, the amount required to “redeem” the property, including interest, costs, and other charges, must be determined based on the particular laws and rules of the relevant taxing authority. The burden may be greatest in cases where a substantial number of loans being monitored are to “non-prime” borrowers, since the frequency and severity of defaults by such borrowers may be relatively greater than for other loans. When delinquency conditions are not identified and addressed in a timely manner, the cost impact to a lender can be significant.
It would be desirable to have systems and methods to more effectively ensure that tax delinquency conditions on real properties are promptly identified and acted upon in a reliable and efficient manner. In addition, it would be desirable to have systems and methods that reduce demands on system requirements such as processing loads and bandwidth.